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Posted at 12:05 PM ET, 03/02/2012

Gray says revenue projection is ‘unrealistically low’


Gray’s challenge to Gandhi’s revenue figures may well be unprecedented. (Sarah L. Voisin - THE WASHINGTON POST)
Earlier this week, D.C. Chief Financial Officer Natwar M. Gandhi released updated city revenue projections. The news was good — an additional $34.8 million in the current fiscal year, $35.7 million more in the next — but Mayor Vincent C. Gray thinks it should have been better.

In an unusual and possibly unprecedented move Thursday, Gray (D) pushed back on the numbers in a letter to Gandhi, writing that the projections “may be unrealistically low” and asking for “additional information regarding several assumptions behind your economic modeling.”

The letter comes a month after Gandhi announced the city has generated a $240 million surplus in fiscal 2011, a budget year for which city leaders had to cover a $188 million budget with tax increases and spending cuts. The big surplus has officials groaning that more accurate, less conservative projections from Gandhi could have saved them from making tough, politically difficult choices.

Gray noted a number of trends that would suggest the city might be on track to generate even more revenue for government coffers -- a growing population, falling joblessness and economic growth.

”It is difficult for me to believe that the revenue impact of these positive trends in fiscal year 2013 will be as insignificant as you currently project,” Gray wrote.

He also challenged the notion, reflected in Gandhi’s statements in recent months, that federal spending cutbacks will spell relative doom for the city economy.

The letter is notable because while the CFO is appointed by the mayor and confirmed by the council, it is an independent position meant to be insulated from political pressure. An appointee, for instance, cannot be removed without serious cause. Gandhi’s current term expires at the end of June.

David Umansky, Gandhi’s spokesman, said his office is studying the letter. He said he is not aware of any other mayor has challenged revenue figures since the independent CFO’s office was established in 1995.

”There have been questions, but nothing like that,” Umansky said.

The letter:

By  |  12:05 PM ET, 03/02/2012

Tags:  D.C. city government, Vincent Gray, Natwar Gandhi

 
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